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Understanding Credit Card Acceptance In Your Business
The information contained herein is believed to be correct. No warranty
is given either express or implied. Why Accept Credit Cards In Your Business? It’s a rare business that does not need to accept credit cards. Unless you can take money in whatever form your client offers that customer is going somewhere else. How much business can you afford to loose? Businesses that never needed credit cards before are regular users of the service today. Heating and Air Contractors, builders, funeral homes, fire extinguisher service, pet toys, personal trainers, all types of retail and wholesale business as well as many companies who sell to or service industrial clients are all starting to accept credit cards. Professional services such as doctors, lawyers and accounting services must accept credit cards. Where does your business fit in the electronic payment equation? Accepting credit cards is now a mark of legitimacy in the business world. Can you imagine a retail business that cannot take a credit card in payment. The good news is accepting credit cards is not difficult nor is it expensive. A reputable processor such as E Z Pay, Inc. can have your account set-up in hours and have your staff completely trained in the use of this payment form quickly and at no additional expense to your company. Which Credit Cards Should Your Company Accept? Asked differently, which customers do you wish to turn away and loose to your competitor? None, right? We recommend you accept all major credit cards and here’s our rationale. Occasionally we find a business owner who is convinced, "In Error", that accepting only some credit cards and not accepting others offers the customer some ability to pay with their credit card and is the smart approach to minimizing credit card costs. What that merchant fails to recognize is the displeasure his customer gets from being told his or her preferred method of payment is unacceptable to the merchant. That customer may pull out one of the acceptable cards for this purchase but you have lost a regular customer in most instances. The math for this approach doesn’t work out either. Traditionally, Visa and MasterCard have been the lower of all major credit cards in their discount rate. Travel and Entertainment cards like American Express or Diners Club have a higher discount than traditional Visa or MasterCards. The smart micro-manager thinks he can then accept the lower discount cards and force his client to use from that selection. Today, Visa Business Cards, Corporate MasterCards and Purchasing Cards of all sorts have higher discounts as well. When the product mix is examined you are not better off doing a cherry picking approach. At the end of the day the only cost that matters is your real overall cost of accepting credit cards. When you look at total credit sales and divide your total expense into this sales figure you get the real answer. Diluted in such a manner no one credit card type is going to have a huge impact and you don’t have to embarrass any customer because you don’t take his card. How Does The Money Come To My Business? An account is established at one of our member banks for your business. This is a clearing account only and you will continue your regular banking relationship for business checking wherever you choose. When you accept a credit card and the card is "swiped" reading this magnetic data your equipment calls our network. The network acquires the data you have transmitted and the card is verified. An approval or decline is sent back to your terminal. This all happens in about 15 seconds. If your equipment is printer enabled it will produce the sales receipt necessary for your customer’s signature. At the end of your business day you will "settle" your account to our system. It’s just a couple of keystrokes and the host knows it’s time to pick-up your money. We present your charges to the (ACH) automated clearing house that evening and collect the funds. The funds less discounts are then transferred to your regular d.d.a. account. Your money less your discounts is wire transferred into your account. The process usually takes 48 hours but some large customers can get as low as 24 hour service. American Express, Diners Club and Discover are all different usually taking slightly longer. Here’s a very important point. Every legitimate acquiring processor is a registered (ISO) for a member bank of the Visa /MasterCard associations. E Z Pay, Inc. is a registered ISO with First National Bank of Omaha’s First of Omaha Merchant Processing. E Z Pay, Inc. is also a registered ISO of The National Bank of Commerce in Memphis, TN. Make certain you have this information about anyone you consider for your merchant processing. Remember, they are handling your money. Large sums of your livelihood are in their hands on a daily basis. How Do We Choose Which Credit Card Processing Company To Use? This whole brochure is a commercial for E Z Pay, Inc. but we are not the only people in this business and we are not the only good company who cares about its clients. You will be bombarded by offers in the mail and on the telephone right after your company does something as innocent as schedule new telephones to be hooked up. When you get your business license prepare yourself for the onslaught. Choose your business relationship with a processor just as you would choose a partner or a professional such as your doctor. You don’t choose a doctor because they are the cheapest one in town. They are chosen because you have confidence they will do a good job or someone has referred you to this person because of experience. At E Z Pay, Inc. we are happy for you to talk to our clients. We are not perfect but we are very committed to making sure things get corrected when we discover imperfections. The single most important thing you can demand from any sales organization you deal with is a statement in writing from a company officer indicating there is no fixed contract period and no liquidated damage for early termination of your contract. It must be in writing and it must be from a company officer or you will never be able to enforce this clause. At E Z Pay, Inc. there is never a contract period and there is never a liquidated damage fee. You are free to leave us whenever we do not please you in the way we deliver your service. We don’t loose customers. Our clients send their friends and their business acquaintances to E Z Pay, Inc. when they require credit card services. Many of our longest term clients have opened multiple locations adding these to our business portfolio as well. Long term steady business is what we seek. What Type Of Equipment Should My Business Use? It’s difficult to go wrong by very much if you will stay with major manufacturers of equipment for Point of Sale. These include in no special order Verifone, Hypercom, Dassault, Nurit and DataCard. There are other lower volume suppliers but the ones mentioned herein have models supported by almost every processing company. This would be very important if you would wish to change processors later down the road. Our web site has a far more informative catalog with detailed data sheets on most models, pricing and generally what lease or rental fees should be in these items. You will find this information on our equipment and software page. The method of payment is where you need to be careful with equipment. Most companies including ours provides leasing for clients who want this option. However, it must be noted that these leases are not cancelable for any reason. Once you have verified this small equipment lease it’s for 48 months or death do you part. Quite often the slick salesperson will indicate that while the lease may not be cancelled it can be simply transferred. There is nothing simple about transferring a lease and the last person who is going to help you do so is the salesperson trying to lease a customer another machine. It would mean sacrificing a sale to accommodate your needs. While that is a nice idea it seldom happens with companies dependent upon equipment sales and leasing. If you definitely plan to put heart, mind and pocketbook into the business and intend to be around in 48 months you are in a position to benefit from leasing equipment. If you have doubts use a credit card. Any reputable company should be able to accept your card. You can then pay it off as you see fit. Rental of Point of Sale Equipment is an option at E Z Pay, Inc. Rental fees are usually slightly lower than lease fees. E Z Pay, Inc. has a 12-month agreement for rentals and requires only a $100 security deposit. In the case of frequently changing equipment it may be a good option to rent instead of owning just as most businesses do their facilities. If you choose to purchase this or other equipment from E Z Pay, Inc. at anytime in the future the rental agreement is voided. There is always cash payment and you generally get the best deal with cash. Unfortunately, cash is the key ingredient in making a new business successful so it’s generally in short supply or already committed. Use your cash for the business and rent or lease equipment for POS. What Should Our Business Look Out For To Avoid Losses Due To Fraud? Truly going into detail on the subject of fraud could require volumes. Fortunately, the business can be split into risk categories very simply to eliminate much of your worries. If you will have the credit card present in your business at the time of the sale and are able to obtain both and authorization and signature the largest part of your risk is eliminated. Determining the identity of the user and that they are the owner of the card is key in minimizing your risk. Your signed receipt needs to be generated by either "swiping" the card through the magnetic reader and printing the receipt or by striking a receipt with the card in a manual imprinter (knuckle buster). You may someday have to prove the card was present at the time of sale. The identity must match the card. Do not let a wife use the husband’s card etc. Anytime a card will not read magnetically you must make a manual imprint for your own protection. The most prevalent type of fraud in face-to-face transactions is called skimming. This happens when a legitimate cardholder has their magnetic strip scanned by a crooked waiter or retail employee and later those data are scanned onto a legitimate card that has been stolen. The owner of the stolen card has turned it off but the dead card lives again with the newly stolen credit card identity. Skimming is the reason we install security, which asks you to enter the last four digits of the credit card manually. If the front does not match the back it’s a bad card and won’t be allowed. Keep an eye on your retail or restaurant employees for signs that they are recording credit card numbers. There is never a reason to take the card below desk level or to a back room. When you are doing business with clients who will not be present with their credit cards at the time of sale it’s a whole different ballgame. No face to face relationship exists and you are not in a position to look for body language or anything else that will make you more comfortable. That’s why you depend upon technology. Address Verification is a system by which we can verify the user knows the billing address for the credit card being used. If the address doesn’t match the decision is yours as to making the sale or not. Many on-line or gateway services like the one we use at E Z Pay, Inc. have built in bum databases as well. Still, nothing is perfect so keep your documentation as tight as possible. That’s especially true with hard goods. Ship any hard goods by verifiable means. Common Carriers, UPS, Federal Express, Railway Express to name a few have signatures required at the time of delivery. It is impossible to overstress how important this delivery aspect is to making certain you get paid. Develop your own "bad" and "good" customer profile and use it. Remember, it’s better to miss a good deal to caution than to get a bad deal. When you loose a bad deal 100% cost is the way it goes plus paying the discount to the credit card company. Be careful and choose to be in business with a processing company who knows the business. A little free advice will save you lots of money and frustration. What Should My Business Do About Check Processing? Until very recent check verification and guarantee depended upon the use of large databases and traded information on bum check writers and their accounts. If the check writer had an NSF or Account Closed return within the system it was posted in a couple of days. This eliminated that person or checking account from writing checks at locations using that particular service. The first few bad checks this person writes at any location will not show up on the radar. This system was designed to eliminate the punk writing bad checks but does very little to bother a professional. Visa has introduced a new check guarantee system that actually does check the balance of the account in question at the time of sale to verify funds are available. Visa’s system is the only one that actually checks and verifies funds on hand. Once the check is run through the system it may be given back to the writer. It has been converted to an ACH (automated clearing house) transaction and will be directly deposited into the merchant’s bank account. Don’t be fooled by claims of existing systems that check the bank database for verification of funds. Only the Visa system does this and it will not be available until the fourth quarter of 2001. Until then just be careful and don’t sign a yearlong agreement. Internet Business and Transactions The use of the Internet in one manner or another is always going to be key to some portion of your business. Just as the telegraph was revolutionary in business communications and was later replaced when the telephone became a more effective means of voice communication the Internet affords business with another level of communication. Where business has embraced the available technology of the Internet and used it to enhance existing or new endeavors that also have other means of business communication and product delivery this has been a very successful integration. Businesses that began with the objective of replacing bricks and mortar entirely with on-line sales on the Internet or started the business in this manner have been largely unsuccessful. Even having reported this, there are still exceptions. There is room for Internet transactions and sales in almost any retail or wholesale operation when properly done. In support of this activity the transaction-processing world manages Internet business differently than a mail order or face-to-face transaction. The added media of the Internet and several computer interfaces to this transaction not normally present in a more traditional transaction make this necessary. When you begin the selection of products necessary to support Internet sales one of the key items will be a "shopping cart or catalog" As you choose this software make certain this is supported by one of the major processing network providers AuthorizeNet or Verisign. There are others but these two seem to have a better grip on the marketplace than others we have used. Pricing is similar and performance is equivalent. At E Z Pay, Inc. we facilitate this type of program for you and set-up both your merchant account for the Internet and the service with AuthorizeNet. There is no fee for your merchant account but AuthorizeNet does charge $100 for their initial set-up plus ongoing monthly service fees of $20. Please read their service agreement which we will gladly send to you upon request at 1-888-592-5251. Wall Street may be in a spin about certain Dot.com companies but we see a strong future for the Internet in commerce especially between businesses as supplies and products for inventory are ordered via this media. Discount Points (Discount Rate): Refers to the percentage taken by a processor of a gross sale amount. All payment for the processing including payments to the issuing bank are taken from this discounted amount. Transaction Fee: Usually expressed in cents per transaction this fee is attached and is part of payment of the discount. Usually expressed by a percentage of discount plus X number of cents. POS - Point of Sale: refers to the sales location and specifically to the processing equipment at that location facilitating the sale. Any major brand. Equipment: Refers to card swipe machinery and the software drivers necessary to operate the equipment. Chargeback: Claim from a cardholder disputing a charge by a merchant. Fraud: Any of several schemes used by criminals to make unauthorized purchases with stolen credit card numbers. Processing Company: Independent sales and marketing companies contracted by member banks to sell merchant processing accounts. Member Bank: An FDIC bank with membership in the Visa and/or MasterCard Association. Visa: Non-profit association dedicated to promoting the use of Visa credit cards and acceptance of same in merchant locations. Owned by it’s member banks. MasterCard: Non-profit association of member banks promoting the use and acceptance of MasterCard Credit Cards. Authorization: Approval indicating the charge relationship and credit line are appropriate for the charge proposed. Swipe: The mechanical process of passing a credit card over a magnetic reader. Ach (Automated Clearing House): Electronic method by which banks and ISO’s transfer funds to settle credit card and check transactions processed daily. Lease: Full contractual commitment to pay the full amount over a specified period. As used in this context non-cancelable. Skimming: Fraudulent activity involving the magnetic capture of credit card data and subsequent unauthorized use of the same. |
Independent Sales Agent for Retriever
Payment Systems, who is sponsored by
First National Bank of Omaha for Merchant Credit Card Processing
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